Failing to take an interest in your superannuation could be costing you hundreds of dollars a year in duplicate insurance fees.
Of an estimated 14.8 million Australians with a super fund, around 43 per cent have more than one super account, according to 2016 Australian Tax Office Figures.
New research from consumer group CHOICE has found that where insurance policies are duplicated in different super accounts, that this could be costing consumers up to $1.96 billion a year in unnecessary fees.
“Consumers are wasting a small fortune paying for duplicate insurance policies … it’s time we had protections backed by the regulator to stop the erosion of consumer retirement funds,” says CHOICE CEO Alan Kirkland.
Women and less likely than men to have more than one super fund, the ATO says.
Financy’s latest news poll suggests that for most people, the last time they checked their super was sometime this year.
The research comes as CHOICE prepares to appear before a Federal Parliamentary Inquiry into the Life Insurance Industry in Sydney today.
In various submissions to the Inquiry, both CHOICE and the super industry has called for the developed of a self-regulatory code that would improve service standards for consumers.
But Mr Kirkland says for that to be effective it needs to be enforced by the Australian Securities and Investments Commission (ASIC).
“A registered code will begin to rebuild the consumer trust that has been lost in the entire industry after a string of life insurance scandals. We know there are honest players who have had their reputations tarnished, but the whole industry needs to lift its game.
“There is an existential risk to the life insurance sector if it doesn’t start putting the consumer at the centre of its product design.
“We’ve seen too many people paying for duplicate insurance through their superannuation, being sold inappropriate products and having claims defeated for unfair fine-print exclusions,” says Mr Kirkland.
CHOICE’s submission to the Inquiry also found there could be significant improvements in how insurers communicate with their customers.
“Consumers should be given clearer information about the insurance they’re buying to help them understand why or if they need it, how much it costs and what the benefits are when they sign up. Problems in default superannuation funds in particular need to be addressed, where many consumers have little idea that they even have cover,” said Mr Kirkland.